A rising sun? Japan sees the light

Japan's low-profile in the new economy may be in the past, reports David Bicknell

Japan's low-profile in the new economy may be in the past, reports David Bicknell

A year ago, the idea that Japan could be a leader in e-commerce would have been stretching credibility. Even given the nation's taste for electronic wizardry, precious few Japanese companies had embraced electronic commerce.

Now, though, a couple of Japanese companies are worthy of scrutiny, because they are showing the rest of the world best-practice in two things: mobile commerce and online selling.

In mobile commerce, NTT's DoCoMo has been so successful in its home marketplace - 32 million Japanese or 60% of the local market use its phones - that it only has one place to go - overseas.

In online commerce, Toyota's Gazoo portal has set a standard for online commerce that almost rivals Amazon. The carmaker's original plan was to set up a car-selling site that refers would-be customers to car dealers. That plan is two years into delivery, has 600,000 members, and has been expanded to cover a string of products. Not only CDs, but books and a range of other services.

Both DoCoMo and Gazoo have been so successful that they have already called into question the viability of other homegrown European and US initiatives. In the US, the success of Gazoo for Toyota dealers has left them shunning pure-play online start-ups such as CarPoint and Autobytel. That's because online start-ups require dealers to pay them referral fees, while Gazoo's site offers dealers the same thing free of charge.

Similarly, the heady European hype around WAP has subsided. In contrast, I-Mode is the world's first mobile Net service to offer a constant online connection and worthwhile content. By encouraging customers to personalise the mobile data services accessed on their handsets, operators make switching wireless services more of a hassle for consumers.

So, what can be learned from these two Japanese success stories?

1) Experimental projects sometimes succeed in a big way.

Gazoo began life as a little-mentioned network that enabled the company's dealers to display photos of used Toyota models in cyberspace. Then, by hooking it up to the Net, Toyota dramatically increased the number of consumer eyeballs checking out the cars.

2) Look beyond your business to eat someone else's lunch - before they eat yours

Though some believe Toyota's concentration on Gazoo may mean it takes its eye of the ball in its home market, Gazoo is gaining serious mindshare, reputedly an extra 50 vendors, 500,000 members, and 2,000 new subscribers every day.

3) Think big, think global

Though DoCoMo still faces hurdles in getting itself established internationally, it already has a string of US players wanting to partner with it, including links with Sun and Microsoft, and it has taken a stake in Hong Kong's Hutchison Telecom.

It is also evangelising on wideband CDMA, which should enable users to view streaming video and other Net applications at 2megabits per second by 2003, against just 9.6 kilobits today.

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